Amazon raised $10 billion in the bond markets, including $1 billion of debt yielding just 0.4% — reportedly the lowest rate in the history of US corporate bonds

• Amazon raised $10 billion in corporate debt markets Monday, including a $1 billion bond yielding just 0.4%.
• The Financial Times reported that this was the lowest interest rate for any bond in US corporate history.
• Amazon, which has clearly come out as a winner during the pandemic, saw its $10 billion offering being oversubscribed by more than three times, the FT said.
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Amazon benefited from the cheapest ever borrowing costs in the US corporate bond market on Monday, the Financial Times reported.

In a remarkable turn for the company whose bonds were considered junk in 2009, Amazon raised $10 billion in the bond markets at extremely low rates, including a new three-year debt offering with an interest rate of only 0.4%.

The three-year bond was worth $1 billion of the total issuance, according to bond information website Cbonds.

Amazon's new interest rate is reportedly below a prior record-low of 0.45% secured by some companies such as Apple, IBM, and Walt Disney in 2012 and 2013.

The company's $10 billion offering was oversubscribed by more than three times, the FT said, citing unnamed sources. The newspaper added that Amazon said the money will be used for "general corporate purposes."

The last time the e-commerce giant tapped bond markets it issued a three-year bond at an interest rate of 1.9% in 2017, the FT said. At the time it was raising money to fund its purchase of Whole Foods.

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Amazon has come out as one of the biggest winners during the worsening business climate of the coronavirus pandemic, as consumers looked to e-commerce retailers for general shopping and essentials.

In April, Amazon reported a 26% revenue spike in its first-quarter financials to $75.5 billion, but its costs increased as the company had to implement additional safety measures and hike pay for warehouse employees.

According to Cbonds, the bonds issued by Amazon were as follows:

• A $1 billion bond for three years, yielding 0.4%.
• A $1.25 billion bond for five years, yielding 0.8%.
• A $1.25 billion bond for seven years, yielding 1.2%.
• A $2 billion bond for 10 years, yielding 1.5%.
• A $2.5 billion bond for 30 years, yielding 2.5%.
• A $2.5 billion bond for 40 years, yielding 2.7%.

The bonds were underwritten by a variety of banks, according to Cbonds, including JP Morgan, Goldman Sachs, Deutsche Bank, HSBC, Citigroup, Morgan Stanley, Societe Generale, TD Securities, and Wells Fargo.

Amazon did not immediately respond to a request for comment from Markets Insider on the debt issuance.

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